Which is the better product - Bondora Go & Grow or Mintos Invest & Access?
In the start of June 2019, during the P2P conference in Riga, I published an article about the then brand new Mintos Invest & Access product. This product is in some ways similar to the Bondora Go & Grow product. When I visited the Bondora office in Tallinn, they told me that 1/3 of their investor portfolio is in Go & Grow. This paints a clear picture that this type of product is really popular with investors and has great potential. Bondora has been in operation since 2007, but the Bondora Go & Grow product is fairly new. Both Bondora Go & Grow and Mintos Invest & Access promise that the investor can sell their investments and get the money out right away. With Bondora Go & Grow you can get all the money out no matter the status of the loans you are invested in, but offers a lower interest rate than Mintos Invest & Access. On the other hand, with Mintos Invest & Access investors can only get the money out that are currently not late. Some loan providers at Mintos also does not offer interest payments on late loans. So it is not quite clear which product is the best.
I therefore decided to transfer 500 euros to each platform at the 1st of August 2019. I invested the money at the same time and I did not deposit any more money to the two portfolios. Every month I did a status of the progress and earnings, to share with you which portfolio is currently ahead on different parameters.
Below you can see the results for both portfolios for the 7 months I ran the experiment.
Liquidity, interest rates and compounded earnings month per month
The first month Bondora Go & Grow was actually in front of Mintos Invest & Access in terms of earnings, even though the interest rate is lower on Bondora Go & Grow. In the second month Mintos Invest & Access caught up and was in front the rest of the time of the experiment. This was, of course, also what I expected because of the higher interest rate on Mintos Invest & Access.
In the graphs below you can see the change in the available amount for withdrawal and the change in interest rate for Mintos Invest & Access during the experiment. Bondora Go & Grow normally always has the same values. 100% can be withdrawn at any time and the interest rate is 6,75%* capped. This means that the interest rate will not be higher, but could go lower, if Bondora decides to change it. This has not happened yet, though. These are probably the numbers that will decide which is the best of the two products for you. You want to earn well, sure, but you may also want a certain level of liquidity.
Problems with liquidity when there are massive withdrawals
During the spring of 2020, the liquidity on Bondora Go & Grow has suffered. Do to the big fall in stock prices, many investors want to buy stocks with their P2P funds. Together with some loss of trust in the crowdlending industry in general, due to some platform fails and scams, there has been a huge amount of withdrawals from the platforms in general, no matter the stability.
For Bondora this means that a mechanism, to prevent a bank run like situation, has been activated. If you request a full withdrawal of your funds at the moment, you will only be allowed to withdraw about 5% of the amount every day or every other day. At least for my account. It has varied a bit. The amount you can withdraw is transferred to your “Main account balance”, while the rest is stuck for a while under “Withdrawals pending”. I expect this to go back to normal in a some months, once the situation with COVID-19 and investor withdrawals starts to normalize. You can read a bit more details about partial payments in the Bondora support section.
Mintos Invest & Access has another setup. I cannot fully withdraw the amount available to cash out, but only part of it. This is due to the current less liquid Mintos Invest & Access secondary market, where your loans need to be sold in order to withdraw the money. So I have to wait for other investors to buy my loans or wait for them to mature. I also expect this to go back to normal in a some months, once the situation with COVID-19 and liquidity on the secondary markets starts to normalize again.
Which product will I continue to use?
I have never been crazy about Mintos Invest & Access as you can also see in my article about the product, when it first came out during the P2P conference in Riga in 2019. In my personal opinion, the product looks like a way for Mintos to get the loans financed, that few investors using custom auto invest wants. As I already use custom auto invest on Mintos, I see no reason to continue to use Mintos Invest & Access, as you can usually make more money with little hassle and purely better rated loan originators with custom auto invest. On the other hand, Mintos Invest & Access is very simple to setup and use and this is definitely important to some, especially new, P2P investors.
Bondora was my first crowdlending platform and even though I am, at least for now, no longer using Portfolio Manager and Portfolio Pro, Bondora Go & Grow will most likely always stay part of my portfolio. I actually think that specifically the Go & Grow product is Bondoras real strength today. Combined with one of the longest track records out there, I see this as a really solid product and platform. For (normally) instant liquidity, 6.75%* is a pretty good return for such a simple and completely passive investment. You could argue that you can get the same return investing in stocks, but it is always good to diversify and I like the same monthly residual income that it offers. Another benefit at Bondora is, that you can start investing with as little as 1€. If you sign up using the green button below you will get a 5 € bonus added to your account, right after you sign up! I visited Bondora in the summer of 2019 and you can have a look at my visit and interview in this article.